In the backdrop of an economic contraction following the Covid pandemic, the Narendra Modi government will present the budget for 2021-22 next week. But all eyes will be on the money that the government will allocate to the defence ministry.
This is primarily because unlike most countries of the world, who are largely battling a slowing economy due to the Covid 19, India is facing another big challenge — China. And so, there is a greater expectation among the armed forces, which have been reeling under acute financial crunch, for increased allocation to meet their modernisation plans.
The armed forces are up against China, a country with the second-largest defence budget in the world. In 2020, China’s official defence budget stood at $179 billion, three times that of India’s.
While India’s defence budget for 2020-21, including pensions, constituted 15.5 per cent of the entire expenditure plan of the central government, China’s official defence allocation was 36.2 per cent of the country’s budget.
I use the term ‘official’ because since the late 1990s, many analysts have believed that major components of Chinese military activities are not reflected in the defence budget released by the government.
In its latest report, the Stockholm International Peace Research Institute (SIPRI), a Swedish think tank, pegged China’s actual defence budget in 2019 at $240 billion as compared to the official figure of $175 billion.
Let us understand one thing – India can never match China’s defence spending and it will be foolhardy to even think it should.